Nice recovery in the ten year treasury today

By
Real Estate Services with Timu Corp - CEO, ActiveRain - Co-founder

Finally some news that should be positive for mortgage rates.  The 10 year treasury bond rallied pretty good today (yields down).  The yield dropped closed the day at 3.78% down from 3.92% just the other day.  All things being equal this should provide some relief to fixed mortgage rates from the drive upwards they've had the last week.

The main catalyst for this drop in rates were too awful economic reports this morning.  The Philadelphia Fed manufacturing index coming in at -24 vs an expected -10, where any negative numbers indicates contraction instead of growth.  The conference boards leading indicators came in at -.1 the forth straight month it's been negative also indicating growth contraction.  Kinda weird the conference board put out a nice fluffy report yesterday saying a recession is unlikely despite their own indicators showing we are most likely in one right now. 

Bond yields also tend to drop along with the stock market (which dropped today) as money makes a flight to safety from equities into bonds. 

 

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Rainer
1,092,162
Matt Heaton
Timu Corp - CEO, ActiveRain - Co-founder

"Inflation from printing too much money is becoming a big problem."

Who's printing money?  The inflation heavy inflation we've had during the last 5 years was caused by the expansion of credit.  This is contracting very rapidly now, deflation is the real concern, the commodity and equity markets as usual are just behind curve. 

February 21, 2008 08:12 PM
Ambassador
883,219
Lane Bailey
Realtor & Car Guy
Century 21 Results Realty
I'd like to see a little deflating at the diesel pump when I fuel up...   Not that I'm expecting to. 
February 21, 2008 10:22 PM
Ambassador
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Jeff Belonger
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans
Social Media - Infinity Home Mortgage Company, Inc

Matt.... it was a nice, refreshing day today. And even if the market is flat tomorrow, hopefully we'll pick up another 1/4 pt in pricing.  But it could be another good day for bonds tomorrow, because the Asian market is taking a beating. I just need some good results going into the weekend. As Eric mentioned, 10 yr.... but the best pricing right now is the 7yr and or 5 yr arms. 

jeff belonger
February 21, 2008 10:47 PM
Rainer
1,092,162
Matt Heaton
Timu Corp - CEO, ActiveRain - Co-founder
Bonds are very likely to get a lift from money rotating into them out of stocks over the next several weeks.  Lots of different indicators are now starting to point to a pretty big sell off in stocks in the near future.
February 22, 2008 12:19 AM
Anonymous #9
Anonymous
Anonymous
Matt, I hope you are rigth.  I have a dozen refis waiting for a break in rates.  A good day tomorrow will be a very busy weekend. Thanks for the post. AJ
February 22, 2008 12:44 AM
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Matt Heaton

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Additional Information

My ramblings about growing ActiveRain, the real estate industry and something I follow very closely, credit markets.  Why "The ActiveRain Addiction"?

  • My latest startup project FossilEra
  • Starpires - A Strategy Game I Designed